OM5 C4 IM
Case Teaching Note: Sustainable Lawn Care Case Study
The case focuses on how two firms in the same industry define their business strategy in
different ways–one currently from a pure physical perspective and the competitor from a
full service perspective. The case makes use of most of the ideas and paradigms in
Chapter 4 on Operations Strategy. One of Lawn Care’s competitors began an application
service for parks and golf courses that routinely applied the fertilizer and grass seed for
its primary customers. This competitor bundled the application service to the primary
goods, fertilizer and grass seed, and charged a higher price for this service. The
competitor sold the customer “a beautiful lawn with a promise of no hassles.” To the
competitor this included an application service bundled to grass seed and fertilizer. The
competitor learned the application business in the parks and golf course target market
segment and was beginning to explore expanding into the residential lawn care target
market. To avoid the liability of storing toxic fertilizer outside the competitor applied it
the same day it was delivered to the customer’s site.
The Lawn Care Company sold the “highest quality physical products” in the industry but
they were not currently in either the professional park and golf course or the residential
lawn care application market segments. A typical Lawn Care CBP analysis shown below
provides the big picture. Make sure the student understand that processes create and
deliver each peripheral or primary good or service and this is where OM has a major
impact on overall organizational performance.
Note: This case has been used in executive education programs so there is more
contained in this teaching note than you can cover in a single class—pick and chose
what you want to emphasize. The value chain diagram is probably most useful on
the board to undergraduates with a quick discussion of how goods and services are
bundled together, and that you need at least one process to create and deliver each
good or service.
Lawn Care Company Example CBP
Primary Good
Peripheral Goods
Peripheral Good
Peripheral Service
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What’s the order winner above? #1 competitive priority is high quality grass seed and
fertilizer—a physical good! How would you rank order the competitive priorities using
this vision of the business? One ranking might look as follows:
It is also useful to revisit Section 4 in Chapter 1 on customer benefit packages (also see
The Competitor’s Example CBP
What’s the order winner? A beautiful lawn with no hassles! Service! How would you
rank order the competitive priorities using this vision of the business?
Primary Good
Peripheral Good
Primary Service
Peripheral
Peripheral Goods
Immediate
Excellence
Service
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The Lawn Care Company defines its business more from a physical product or
manufacturing perspective while the competitor defines its VISION of the business as a
dual CBP where service is equal in strategic importance to the physical product. An even
Case Questions and Brief Answers
1. Define Lawn Care’s current strategic mission, strategy, competitive priorities, value
chain, and how it wins customers. What are the order qualifiers and winners? Draw
the major stages in their value chain without an application service.
The Lawn Care Company defines its business strategy as the “highest quality grass
seed and fertilizer in the world” while the competitor defines their business strategy
as “beautiful lawns with no hassles.” One could view the “no hassles” as part of
The competitor focuses on (1) high product quality, (2) no hassle application to the
customer’s lawn, (3) higher margins on the application service than the physical
Operations management is a key skill to making everything work as promised, that is,
each of the above processes. Some of above processes can be tied to “the physical
good” while other processes focus on the “application service.” Instructor
Please note that the competitor firm requires high quality service providers
(agronomic technician, application equipment operator, sales representative) to
interact directly with customers, that is, service management skills. So, if The Lawn
Care Co. adopts application services it must add high customer contact service
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The following value chain is what we usually put on the board.
Notice with this physical product definition and VISION of the business, Lawn Care
is finished when the grass seed and fertilizer leaves their loading dock (i.e., “the right
2. What problems, if any, do you see with The Lawn Care Company’s current strategy,
vision, customer benefit package design, and pre- and post-services?
There will always be a market for self-service application for golf courses, parks, and
residential lawns (like some step 1-2-3 self-service Four Step program sold at retail
stores) but as the U.S. standard of living and disposable income increases, the market
This case also fits nicely with the pre- and post-production value chain model of
Exhibit 2.3.
Suppliers
Mining,
Farmers,
Grass
Seed &
Fertilizer
Factory
Loading
Dock (Lawn
Lawn Care Value Chain (Focus on Physical Product or Add
Service)
Third
Party
Shippers
Inbound
Shipping
and
Third
Party
Applicator
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Pre-Production
Supplier negotiation and contracts
Employee and customer application service training
Post-Production
Warranty and claims processing
On-line billing and payment
Expect undergraduate students to only point out one or two of these – you will have
3. Redo questions (1) to (2) and provide a new or revised strategy and associated
customer benefit package and value chain that is more appropriate for today’s
marketplace.
Adding the application service (i.e., adding the last box to value chain) and extending
The key to a good application service is (1) good equipment, (2) good seeds and
fertilizer, (3) well trained employees with service management skills, (4) crew routing
and scheduling of labor and trucks, (5) clean freshly painted equipment and crew
4. What does operations have to be good at to successfully execute your revised
strategy?
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We normally get into a discussion of “What does the firm have to be good at to
offer the application service?” Ask them questions like:
(1) How many crews?
(2) What’s the size of an application crew? Equipment? Trucks?
5. What are your final recommendations?
Most students or teams will recommend they offer the application service but how to
(1) 100% company owned application service,
Additional Case Questions to Consider
1. What issues do you see with respect to “green” in this business?
The case hints at sustainability issues with reference to polluted lakes and streams,
(a) Where do you store toxic fertilizer and chemicals once delivered to the job site or
do you store them?
(b) Do employees breath contaminated air when they spray a lawn or golf course, and
what is the impact on their health?
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2. What’s the gross margin on the physical goods (i.e., grass seed and fertilizer) versus
the application service?
Answer: Low for physical goods in the range of 10 to 30 percent while for the
application service is it closer to 100 percent. So, how do you make money in this
3. What are two example processes that create and deliver each good or service in the
current CBP? Briefly describe process issues and related decisions.
Example processes that create and deliver the CBP include:
Equipment and truck purchasing process
Evaluating labor and equipment capacity and demand forecasts by
area
Customers
Application service training, crew scheduling and routing, and
service encounter execution
Postscript
The postscript is the Lawn Care Co. dropped “professional” lawn care service after three
years (the market was too small, limited ability to raise prices, and Lawn Care had little
expertise in OM field service skills such as scheduling, purchasing, and capacity
management) and bought existing and local residential application service firms that
already had the proper OM skills in cities such as Pittsburg, Philadelphia, and Atlanta.
These local firms already knew the neighborhoods and area, weather, and knew how to
do OM tasks. Some of the local firm’s employees were “certified” by Lawn Care with
training programs on how to operate equipment, different types and grades of grass seed
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and fertilizer, how to interact with the customer, and so on. This case takes 45 to 90
minutes to teach depending on what you emphasize.
Ask your students – How many crews do they need? How do you define a crew? (One
The instructor should summarize key case issues such as: (1) How does Lawn Care want
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